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Florida Financial Regulator Has History of Alleged Misconduct (correct)

May 20, 2019, 6:46 PMUpdated: May 30, 2019, 2:54 PM

A pattern of allegations of inappropriate behavior toward female colleagues and an inconsistency in his employment history are raising questions about how well Florida officials vetted Ronald Rubin before naming him the state’s chief financial services regulator.

After less than three months in the job, Rubin was placed on administrative leave May 10 by Florida Chief Financial Officer Jimmy Patronis following allegations of workplace sexual harassment. Since then, two additional complaints alleging inappropriate, sexist and ageist remarks or behavior were made public by Patronis’s office.

The Office of Financial Regulation’s inspector general is now looking into the allegations against Rubin, according to a May 10 statement from Patronis’s office. Rubin declined to comment when contacted by Bloomberg Law by phone on May 17.

Twelve individuals who once worked or had professional interactions with Rubin told Bloomberg Law the Florida allegations are consistent with what they said was inappropriate behavior in prior jobs including at the Consumer Financial Protection Bureau and House Financial Services Committee.

Rubin resigned from the committee in 2015, his last full-time job before the Florida post, after being given the choice between resigning or being terminated due to allegations of sexual harassment deemed credible by the committee, a source familiar with the matter told Bloomberg Law.

Rubin’s attorney said May 29 that description of his departure from the committee was “false.” The attorney said May 28 that “Rubin was not fired by the committee for sexual harassment or for any other reason.”

Several women who worked with Rubin at the CFPB and other places he was employed in Washington told Bloomberg Law he had a habit of making sexually inappropriate comments that made them uncomfortable.

The inappropriate behavior included an invitation to his home and frequent comments on women’s height, weight and general appearance.

CFPB Tenure

The precise length of Rubin’s employment with the CFPB is unclear. Multiple former colleagues said Rubin was dismissed from the agency shortly before completing his one-year probation period. Rubin subsequently filed a lawsuit against the bureau and later reached a settlement, several sources familiar with the matter said.

The resume he submitted for the Florida commissioner job lists his employment from May 2011 to September 2012.

The CFPB did not respond to multiple requests to clarify his employment timeline.

In a May 21 letter to Bloomberg Law, Rubin’s attorney Daniel Blonsky said Rubin did work at the CFPB more than a year, and provided a recommendation letter from former CFPB Director Richard Cordray, dated Aug. 1, 2012, to support that claim.

Rubin “is respected and liked by his colleagues,” Cordray wrote in the letter. “He is smart, well spoken, hard-working and personable,” he said, adding that Rubin helped create several enforcement procedures and policies, ran a weekly lunchtime training program, and helped with orientation of new staff examiners.

“Ron’s excellent work will be used here at the Bureau for years to come,” Cordray said, adding: “Based on my experience working with Ron professionally and personally, I highly recommend him to any prospective employer,” Cordray said.

Cordray’s praise in the letter for Rubin, “is clearly inconsistent with the behavior alleged by your anonymous CFPB sources, and it confirms that Commissioner Rubin was a CFPB employee on August 1, 2012,” said Blonsky, an attorney with Coffey Burlington in Miami.

Cordray did not respond to a request for comment.

FINRA Tenure

Rubin’s resume also said he worked for predecessor organizations of FINRA, the Financial Industry Regulatory Authority, from June 2003 to June 2005. A FINRA spokesman told Bloomberg Law that Rubin was employed there from June 2003 to June 2004.

In his letter to Bloomberg Law, Blonsky said that the resume has one entry for FINRA from June 2003 to July 2005 because both predecessor organizations Rubin worked for, the American Stock Exchange (AMEX), owned at the time by the National Association of Securities Dealers (NASD), and the New York Stock Exchange (NYSE) Regulation, are currently part of FINRA.

Rubin listed the two jobs together “because generally accepted resume protocol dictates that a company or school be described by its current name,” said Blonsky.

A FINRA spokesman told Bloomberg Law that the June 2003 to June 2004 dates as an employee of AMEX reflect FINRA’s official records, and that the organization did not have records for Rubin’s 2004 to 2005 employment dates, which would be held by NYSE Regulation.

The NASD is considered the direct predecessor organization to FINRA, though it later merged with NYSE Regulation to form FINRA in 2007, the spokesman said. Employees who worked continuously for either organization immediately preceding and after the FINRA merger would be considered legacy employees, a spokesman confirmed.

The two year gap between when Rubin left NYSE Regulation and the formation of FINRA in 2007 appears to be why FINRA did not consider him as an employee during the 2004 to 2005 period.

Selection process

A spokeswoman for the Florida Department of Financial Services said Rubin’s appointment was subject to “extensive research and background checks by each Cabinet office” and was done through a “public and transparent process,” including a Feb. 26 public Florida cabinet meeting led by Republican Gov. Ron DeSantis.

Patronis, DeSantis and other cabinet officials, including Attorney General Ashley Moody and Agriculture Commissioner Nicole Fried, who formed the hiring committee, announced the commissioner job opening in January shortly after the new administration took office.

By February, the Tampa Bay Times reported Rubin had emerged as a top-two finalist among nearly 30 candidates to lead the Office of Financial Regulation, which oversees everything from Florida banks and insurers to banking the state’s medical marijuana industry.

At the Feb. 26 cabinet meeting, Rubin said it was hard to “summarize a lifetime of experiences” that formed his regulatory philosophy, but said his approach would be inspired by a quote from President Ronald Reagan about balancing free enterprise and consumer protection.

After Rubin’s testimony, Gov. DeSantis immediately moved to appoint him commissioner, after commenting on how each office had been able to research both candidates’ background and experience.

“This is obviously such an important position to get right,” Agriculture Commissioner Fried said in her concurrence to the appointment. “It’s OFR’s responsibility to ensure a safe financial marketplace for those living and doing business in Florida and to protect our citizens from scams, fraudulent business practices, and all the bad actors.”

The offices for the governor, attorney general and agriculture commissioner didn’t respond to requests for comment.

In a May 13 tweet, Attorney General Moody called for an emergency cabinet meeting following the first allegation against Rubin. She called it “deeply troubling” and said the cabinet should “strongly consider his termination” if it were found true.

Well-Credentialed

At least on paper, Rubin was an ideal candidate. He earned an MBA from the University of Chicago and a law degree from the University of Pennsylvania and had served as an enforcement attorney at the Securities and Exchange Commission where he said he led the prosecution of fashion designer Steve Madden.

He was an early hire at the CFPB in 2011, and his experience there made him an attractive candidate to law firms building consumer finance practices to represent companies caught in the agency’s crosshairs.

Hunton Andrews Kurth LLP hired Rubin as a partner and he worked at the firm from September 2012 to April 2015, according to Rubin’s resume.

A female attorney at the firm told Bloomberg Law Rubin made comments with sexual innuendo to her and criticized her for spending too much time with her family rather than on client matters.

The law firm did not respond to repeated requests for comment.

Hill Aide

Rubin’s reputation as one of the few former CFPB employees willing to criticize the bureau put him in good stead with House Republicans seeking to exercise oversight of an agency many of them viewed as overly aggressive and politically motivated.

In April 2015, the House Financial Services Committee hired Rubin as a Republican staff attorney to handle CFPB and consumer finance issues.

In his application materials, Rubin said he left the committee in September 2015 to become a volunteer for Sen. Marco Rubio’s (R-Fla.) 2016 presidential campaign. He also wrote opinion pieces criticizing the CFPB for several publications, including the National Review, the Wall Street Journal and Bloomberg Law.

“Given the highly politicized history of the CFPB and Commissioner Rubin’s well respected (e.g., cited by federal appeals courts) articles criticizing the agency, it is not difficult to imagine why some CFPB employees would jump at the opportunity to demean him anonymously,” Rubin’s attorney said in his letter to Bloomberg Law.

To contact the reporter on this story: Lydia Beyoud in Washington at lbeyoud@bloomberglaw.com

To contact the editors responsible for this story: Michael Ferullo at mferullo@bloomberglaw.com; Seth Stern at sstern@bloomberglaw.com